Days after loan App lenders were blocked form forwarding the names of loan defaulters to credit reference bureaus (CRBs), Tala regional managerTala, Ivan Mbowa has come out to express his frustrations.
Ivan, who is also the Digital Lenders Association of Kenya (DLAK) board director, blamed unscrupulous newcomers in the mobile money lending sector for the decision to block them from submitting the names of defaulters.
Speaking to a local online publication on Monday, October 12, 2020, the manager noted that the early 15 lenders in the market ensured they uphold the highest standards in their operations before the market was flooded.
“We support regulation. Not all lenders adhere to the same standards. You see this in the way some lenders do their collections from customers and defaulters. You also see this in the way some competitors structure their contracts,” said Mbowa.
The DLAK director communicated that they had worked as a body to ensure all rules are followed in lending and collecting of loans.
His laments come at a time CBK has barred over 337 unregulated digital mobile lenders and micro-financiers from listing the names of defaulters with CRB.
The decision came after a public outcry over widespread misuse of the credit information-sharing mechanism by the lenders, who had listed thousands of people even for as low as 200 shillings loan.
“The withdrawal is in response to numerous public complaints about misuse of the CIS (credit information sharing) by unregulated digital and credit-only lenders, and particularly their poor responsiveness to customer complaints,” the CBK said in an earlier statement.
Tala and the Branch are among the leading mobile lenders in the country, but since the onset of the covid-19 pandemic in March, the two have reduced the number of loans given to customers.
CRBs include Metropol, TransUnion, and Creditinfo International.